Guzmán has won the president’s support, but economists favored by the “red circle” believe he will not be able to lower inflation or conform to radical Kirchernism.

The Minister of the Economy, Martín Guzmán, can stay in place, but without being able to resolve the dilemmas that have led him through his most critical moment in the government, despite the extraordinary wind in favor of Argentina.

“All the brothers”, indicate from the government those who know Guzmán with reference to the Christian tradition that was included in a papal encyclical (Todos Hermanos) to describe that after the storm, now the minister and the undersecretary of electricity, Federico Basualdo, they would stay in their offices; if so, it would result in a clear negative balance for the minister.

Last night Guzmán had a moment to express his position and took advantage of it, alongside the president Alberto Fernandez, who praised his work in renegotiating the debt. At this table, during which the extension of social assistance was announced, the Minister ratified his position on the energy question: “We too must be self-critical. Today we have an energy subsidy system that is pro-rich. In a country with 57% of child poverty, we spend to subsidize the consumption of electricity and gas of a part of the population which today is not a priority to receive these subsidies., neighborhoods where high-income people live ”.

“These resources must be used for what Argentinian society needs most today. Our commitment is to be able to rationalize management and power, from the point of view of State investments, to devote resources to those who need them most, ”he concluded, supported by the presence of the president. by his side .

Alberto Fernández will listen to the same complaints he must have heard two weeks ago regarding the agreement with the International Monetary Fund: the budget deficit, the paralysis of public works and the obstacles to imports and the transfer of dividends

In this sense, Guzmán will have the chance during the trip to Europe that the president hear firsthand the same claims he must have heard two weeks ago regarding the deal with the International Monetary Fund (IMF), the budget deficit, the crippling of public works and obstacles to imports and dividend payments , among other questions.

“This situation is unusual: a government in crisis with soybeans at nearly $ 600 and the IMF grant of $ 4.3 billion coming this year“, lamented one of the economists consulted by Infobae, aligned with the majority who believe that Guzmán, “will remain, but seriously injured.”

What does this status mean? “That now he must show that what he says, he complies immediately”, after being unauthorized in his fight with the harshest wing of Kirchnerism in matters of rates and control of public spending, beyond of what happened yesterday.

For the few financial market analysts who still follow Argentina’s news and for the IMF, complying means that at least this year there will be a review of Argentina’s economy under Article IV, that the government had proposed in parallel with the negotiation of a new agreement to negotiate the postponement of the payment of the debt of 45 billion dollars.

The start of Article IV could allow the country, for example, to prevent the Paris Club from declaring a default on Argentina’s debt, but the IMF does not believe that this review will not be feasible within months. to come up.

Are there any chances that the IMF capital maturities of around USD 4 billion will be postponed until next year, as has emerged in recent hours? The initiative was discussed in the US Congress in 2020, hasn’t made much headway, and appears to target very poor countries more. before emerging countries, but the president of the Chamber of Deputies, Sergio massa, has made some efforts to see if it is possible that Argentina, with 42% poverty, is included in this peloton.

For the head of a Wall Street investment fund, the potential arrival of these additional resources, or the postponement of IMF payments for a year, “will only prolong the inevitable agony of adjustment that the government will have to operate sooner or later; he can save time, but he should use it to solve some of the problems and not to continue to increase costs ”. “The principle of ‘most famous villain …’ applies to Guzmán among investors: although few people believe him, he is better than anyone who can replace him,” he explained, delighted by the announcement of the reopening of normal life in Manhattan. .

In any case, both the issue of Special Drawing Rights (SDRs) and that of the IMF’s September and December deadlines seem distant as the economic plan is becoming more and more vague, as he pointed out. Fausto Spotorno, director of the Ferreres & Asociados study.

“The principle of ‘most famous villain …’ applies to Guzmán among investors: although few people believe him, he is better than anyone who can replace him” (off on Wall Street)

“Minister Guzmán and the Central Bank have a plan to stabilize the economy with less emissions and more fiscal control, but this strategy conflicts with the intention of winning this year’s elections., because any plan requires some adjustments“, Spotorno pointed out.

The problem for the minister is that he has several fronts and few results to show, he added. The clearest is that of inflation, which, according to the first preliminary calculations processed at the Palacio de Hacienda, fell to around 4% in April, Therefore, he would accumulate 17% since January and 44% last year.

Spotorno clarified that This high monthly inflation rate is the result of the strong monetary question in the second quarter of last year and, If the government ramps it up again following the second wave of the pandemic, prices can hardly be expected to calm down., no matter how many controls are applied everywhere, even to exports. “And to that, we have to add the Leliq ball, which, if the nerves of retail investors are triggered, it will result in a rise in the dollar,” Spotorno said.

To the acceleration of inflation “must be added the Leliq balloon, which, if the nerves of individual investors fly, will result in a rise in the dollar” (Spotorno)

Neither Spotorno nor other well-listened colleagues in the private sector here and abroad think Guzmán’s plan is too coherent, “but at least he understands what needs to be done.”, said an experienced economist who has already gone through the civil service and knows the troubles of the palace tender.

In this sense, this economist considered that the government’s strategy of “putting more money in the streets” will have little political and consumer effect. “The only way out is reactivation, because the people who have to continue working are no longer enough to receive 10,000 dollars a month. And those who cannot work and earn money will have one less vote for the government, ”he said.

For this reason, they believe that, despite the weakness of the Minister, “what can happen is worse, either. Augusto Costa O Mercedes Marcó del Pont»Warned another consultant. At the same time, he admits the president’s dilemma: “Leaving him to Guzmán is a problem because of the way he was beaten, but also to get him out, because it is not known who would put his eventual successor”, he concluded.

Perhaps this is why the most authoritative word comes from a consultant who once went through the civil service during Kirchnerism and who believes that, with almost everything in favor (good terms of the exchange, a budget adjustment already underway and an opposition not united), the government “ends up scoring goals for its own purpose”.

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